Ethereum supply returns to pre-Merge levels

Insights Ethereum

The Dencun upgrade caused a spike in the supply that essentially erased all post-Merge deflation.

Ethereum’s token supply has surged to pre-Merge levels, marking the network’s longest inflationary period since shifting to proof-of-stake.

According to data from ultrasound.money, Ethereum’s total supply now stands at 120,521,673 ETH. This reflects a net increase of 542 ETH from the 120,526,017 ETH recorded at the time of the Merge in 2022.

Screengrab showing the Ethereum supply on Feb. 5, 2025 (Source: Ultrasound.money)

The recent spike in supply stems from the changes introduced in the March 2024 Dencun upgrade, which slashed Ethereum’s base fee burn rate. This was achieved by reserving block space for layer-2 networks to handle bundled transactions—commonly referred to as blobs.

Additionally, the proto-danksharding mechanism increased data availability, leading to a significant drop in base fees.

Market observers noted that the lower transaction fees have disrupted Ethereum’s deflationary mechanism, causing the network to mint more ETH than it destroys. As a result, the nearly two-year supply reduction has been erased in under a year since the rollout of EIP-4844.